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The Four P's of Google
Marketing Mix Price


Price is another component of the four Ps of the market mix. Price is defined as “The amount of money charged for a product or service or the sum of the values that consumers exchange for the benefits of having or using the product or service” (Armstrong, Gary and Philip Kotler 353). It is extremely important for marketers to remember that individuals in a market are highly receptive not only to the price of an item, but also to the value offered by the product.

Successful companies such as Google take special consideration at the different parts involved in setting its prices. Item such as list price, discounts, allowances, payment periods and credit terms are items that work together to set the price of its merchandise.

List price is one of the fundamentals components of setting a price. List price is defined as, “Price normally quoted to potential buyers” (Boone, Louis E. and David L. Kurtz 718). It is the basic price offered to prospective consumers, yet in many instances the price listed could increase or decrease as costumers select options. Google’s price for AdWords is set on the amount of advertisement per day it provides its consumers. In Google’s case the list price is at five cents per day, however it can go as high as $50.00 per day. The price difference will depend on the amount of advertisement per day that the consumers are willing to pay and the amount of times individuals click to see the ads and how high these ads rank on a search page.

Discounts are another element of price setting. The three types of discounts are quantity, trade and cash. Quantity discounts are offered to consumers for buying in bulks or in large quantities. Trade discounts is defined as, “Payments to a channel member or buyer for performing marketing functions; also called a functional discount” (Boone, Louis E. and David L. Kurtz 719). Last but not least are cash discounts offered to customers for the punctual payment of their invoices. At the moment Google AdWords is not offering consumers any of the discounts mentioned above.

Another necessary item to set price is Allowances. Allowances are very similar to discounts because it also offers to lower the list price, yet it includes extra items not covered by discounts. Two major types are trade-in and promotional allowance. Trade-ins are commonly used in reducing the amount consumers must pay for a product by recognizing the value of a used product. Car Dealerships are a good example of companies that provide allowance to consumer based on trade-ins. Promotional allowance are, “Promotional funds provided by a manufacturer to other channel members in an attempt to integrate promotional strategy within the channel” (Boone, Louis E. and David L. Kurtz 721). Fast food franchisers are organizations that provide promotional activities, such as television ads, to attract costumers to its franchisees. Google at the moment is not providing its customers with discounts nor allowances in its Google AdWords program.

Marketers promoting a product need to take into consideration payment period offered to its costumers. There are different ways in which a company can set the length of time required to pay a bill. For instance organizations can set the time based on the requirements of its competitors. Google payment period is based on its relationship with its customers. New customers located in specific countries need to make their payments with a credit card or by direct debit payments. As soon as the finance department receives the financial information and it is approved, the ads begin to run, yet if a customer has a long and positive relationship with Google its financial department might be able to set a monthly account. This is based on the credit history of the customer.

Last but not least, the credit terms required by an organization to finalize the product price. Google’s structure tightly relates payment periods with credit terms, yet each organizations credit terms vary depending on the type of industry. As mentioned earlier, Google provides a monthly credit limit for those customers with good financial record. The credit limit starts at $50.00 a month and it can increase to more than $500.00 a month.

In sum, price is also an important tool within the 4 P’s of the marketing mix, yet it is important to remember that consumers are also interested in the products value. In many instances if the product does not deliver value the product will be doomed for failure, regardless of its price. Thriving organizations, such as Google, take into consideration list price, discounts, allowance, payment period and credit terms as relevant elements to consider when setting the price.

1 > Google 4 Ps Introduction
2 > Google 4 Ps Product
3 > Google 4 Ps Price
4 > Google 4 Ps Promotion
5 > Google 4 Ps Place
6 > Google 4 Ps Recommendations
7 > Google 4 Ps Conclusion



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